India In Sight #31
India In Sight #31
Weekly updates on Indian private markets
We are Ambassador Capital Partners, an investment firm with a focus on private credit and private equity. Deeply embedded in the private markets ecosystem, ACP works with large global institutions to provide creative capital solutions for companies and asset managers.
In the spirit of making Indian private markets more accessible and transparent to global LPs and GPs, we have launched ‘India In Sight’ – consolidating and curating relevant information and insights from Indian private markets including trends, key deals, fundraises, KPIs and top tier research.
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KEY DEALS
Equity
[Exit] General Atlantic sold its 75%+ stake in Capital Foods, a packaged food manufacturer and marketer, to Tata Consumer, a consumer goods and foods company, at a valuation of c.$610 million. The PE firm acquired majority stake in the company in 2018 for c.$200 million (translating to 3x+ MOIC). (January 12, 2024)
NIIF, India’s sovereign infrastructure fund, to invest c.$50 million in Mahindra Last Mile Mobility, Mahindra Group’s electric three-wheeler manufacturer, for a minority stake. NIIF will invest through the India-Japan fund, a fund managed by NIIF in partnership with Japan Bank for International Cooperation (JBIC). (January 11, 2024)
[Exit] Investcorp and Bessemer Venture Partners, to sell their stake in Medi Assist, an insurance-tech company, in its upcoming IPO valued at c.$1.7 billion. Investcorp is looking to monetize c.$30 million (c.7x MOIC) while Bessemer to harvest c.$35 million (c.13x MOIC). (January 10, 2024)
[Exit] Actis, an emerging markets focused PE firm, is looking to monetize its highway assets for c.$230 million, by selling units in Nxt-Infra Trust, an InvIT created by Actis to hold the six highway assets. (January 10, 2024)
Impact Analytics, a retail SaaS firm, raised c.$40 million in Series B round led by Sageview Capital, a US based investment firm. (January 09, 2024)
[Exit] SoftBank to sell its c.15% stake in Unicommerce, an e-commerce focused SaaS platform, in its upcoming IPO with an estimated valuation of c.$80 million (translating to 35%+ IRR). (January 08, 2024)
Credit Deals and Issuances
REC Limited, a state-sponsored infrastructure financier, to raise c.$435 million via the sale of Yen-denominated bonds, the largest-ever sale of Yen bonds by an Indian company.
SBI raised c.$600 million via 5-year bonds (priced at T+150bps) through its London branch, attracting interest from investors for bids worth c.$3.5 billion.
Adani Green Energy to redeem c.$750 million of bonds by September 2024, ahead of their maturity due in 2025.
Serentica Renewables, a domestic renewable energy platform, to raise c.$440 million in loans from Rabobank, MUFG Bank, Société Générale, YES Bank, EXIM Bank, India Infrastructure Finance Company for their 530 MW renewable project in India.
360 One Prime (f.k.a. IIFL Wealth) to raise c.$125 million through its maiden public issue of secured, redeemable NCDs at c.9%.
KEY FUNDS AND FUNDRAISES
Mahindra Group and Ontario Teachers’ Pension Plan to jointly launch Sustainable Energy Infra Trust (SEIT), an InvIT for renewable assets in India, with an initial capital commitment of c.$430 million from both entities. SEIT raised primary capital of c.$165 million as part of the initial offer of units. (January 15, 2024)
Xponentia Capital, a domestic PE fund, marked the final close of its second fund at c.$135 million. The fund marks an oversubscription of c.45% vs its initial target corpus of c.$95 million. (January 12, 2024)
Edelweiss Alternatives, the alternative asset management arm of Edelweiss Group, raised c.$50 million from European Investment Bank, the Belgium-based development finance firm, for its climate focused fund with a target corpus of c.$500 million. (January 11, 2024)
Nuvama Asset Management, the alternative asset arm of Nuvama Wealth Management, and Cushman & Wakefield, a global real estate services firm, to jointly launch Prime Offices Fund, a real estate focused fund with a target corpus of c.$360 million. The fund will invest in Grade A office assets located across micro markets in six top real estate markets in India. (January 10, 2024)
Oister Global, a homegrown investment firm, is looking to invest c.$125 million with a focus to make LP-style investments in Indian alternative investment vehicles. (January 10, 2024)
Asia Partners, a Singapore based private equity fund, raised its second fund with the target corpus of c.$475 million. The investors include IFC, Financial Investment Corp and Generation Capital. (January 09, 2024)
MARKET INSIGHTS & RESEARCH
Articles
In 2023, Indian startups faced a tough funding environment, with 980+ companies raising $11+ billion (78% growth/late stage; 22% early stage), vs $25 billion in 2022 and $38 billion in 2021. The funding crisis led to widespread layoffs and several closures, marking a year of strategic shifts and challenges in the ecosystem. Read more.
The Indian enterprise tech sector, after raising $7.7 billion in 540+ deals during 2021-2022, experienced a slowdown in 2023 due to its sensitivity to global economic changes. In 2023, enterprise tech startups witnessed a 68% yoy decline in the funding amount, dropping to $1.3 billion vs $4 billion in 2022. [Paywall] Read more.
In 2023, foreign portfolio investors heavily favored the capital goods sector, investing over $5.4 billion, a six-fold increase from 2022, despite volatility in markets and pressures on major sectors like banking and IT. Read more.
Indian fund managers see the reduction in PE funding in 2023 as a re-alignment process, however the industry expects improved tax structures and progressive regulation in the June budget, emphasizing the need for equitable capital gains taxation for private and public markets. Read more.
RBI’s latest guidelines prevent banks and NBFCs from investing in Alternative Investment Funds that invest in their debtor companies, to curb potential loan evergreening. This measure requires liquidation of such investments within 30 days if AIFs invest in a debtor company of the regulated entity. This piece talks about whether RBI’s move is justified and how it impacts the industry. Read more.
Bloomberg to propose including Indian government bonds in its indices from September 2024, which could potentially boost the asset class. The gradual inclusion over five months could see 20% of the Fully Accessible Route (FAR) bonds added monthly, completing the process by January 2025. FAR bonds have no foreign investment limits. Read more.
India's agriculture exports, currently over $50 billion, are projected to double to $100 billion by 2030. Despite export restrictions on key commodities, the country aims for $2 trillion in total exports by 2030. Read more.
Reports
As per Inc42’s latest report, India's drone market is expected to grow from $2.7 billion in 2022 to $13 billion by 2030 at 20%+ annual growth. The current market has over 200+ drone startups with over $140 million in funding. [Paywall] Read more.
As per Anarock Capital's Flux report, PE investments in real estate fell by 26% to c.$2.7 billion in 9M FY23-24 driven by reduced activity from both foreign and domestic investors amid global uncertainties and high interest rates, however the average ticket size increased to $95 million (vs $91 million a year ago). Read more.
India bioeconomy report 2023: In 2022, India's bioeconomy grew by 29%, reaching c.$137 billion, contributing 4% to GDP and employing over 2 million people. This growth, driven by rising demand for bio-products, government support, and reduced biotech costs, highlights its economic significance.
Indian feed industry and alternate solutions report by Invest India provides insights into the Indian animal feed market and outlines that India, the fourth-largest animal feed producer, saw its market grow to c.$14 billion in 2023, and is expected to reach c.$17 billion by 2032.
EY report on Generative AI’s potential to accelerate India’s digital transformation explores how Gen AI can impact Indian economy and discusses the various aspects of how companies and the government can foster leadership in this domain.
CBRE report ‘MSMEs unleashing the engines of economic prosperity’ highlights the critical impact of the ‘Udyam’ scheme, a government program aimed at encouraging MSME development and lays out the key trends and data points.
KPIs
Net FDI in India dropped to $13 billion through September, a significant decline from $38 billion in 2022, as per HSBC. This decrease comes amidst numerous announced foreign investments, from US-led semiconductor plants to large-scale renewable energy projects attracting Gulf countries.
India's faces $10+ trillion funding gap for achieving net zero emissions by 2070, which highlights the need for a carbon credit market in Gujarat's GIFT City. Indian firms will soon be able to list directly on global exchanges through the IFSC, currently a foreign jurisdiction.
In 2023, Gold ETFs in India saw a significant inflow of $360+ million, a six-fold increase from 2022, driven by investors seeking stability amidst inflation, interest rate hikes, and geopolitical tensions.
December 2023 saw over 4 million new SIP registrations, a record 31% increase over November and 74% yoy, driven by a strong bull market. FY24's registrations have already exceeded the combined total for FY23 and FY22, with c.29 million new sign-ups from April to December 2023.
ICYMI
SPECIAL FEATURE: VIBRANT GUJARAT SUMMIT 2024
The recently concluded Vibrant Gujarat Global Summit 2024 saw multiple firms announcing their plans for making significant investments in India with potential investment announcements amounting to $330+ billion. Gujarat aims to contribute 10% to India's GDP and become a $500 billion economy by 2026-27. Key highlights below:
The 10th edition saw the signing of MoUs worth $330+ billion for 41k+ projects, the highest ever amount recorded at the summit
Power, oil and gas, steel and manufacturing sector attracted the highest amount of investment
Total investments via the Vibrant Gujarat platform reached $560+ billion since 2019
Adani Group to invest $24 billion in Gujarat over the next five years. Adani will invest c.$100 billion for green energy in the country over the course of 10 years
Multiple Dutch and Singapore firms plan to invest $7+ billion in India
Maruti Suzuki India to invest $4+ billion for a second Gujarat manufacturing facility, aiming to increase annual production to over 4 million units by 2030-31
DP World to construct a container terminal in Gujarat with further commitments to invest $3+ billion in the coming years
Tata Starbucks aims to expand to 1,000 cafes in India by 2028 from the current 390, targeting Tier-2 and Tier-3 cities and increasing drive-thru and airport cafes
Hyundai Motor to invest c.$770 million in Tamil Nadu for initiatives like a hydrogen resource centre, adding to its $2.5 billion 10-year commitment for EV development
WEEKLY MARKET UPDATE (w/c January 08, 2024)
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